Scott Hudson on the craft behind Henrybuilt kitchens

0:11Hello and welcome to the Entrepreneurs on Monocle Radio, the show all about inspiring people, innovative companies and fresh ideas in global business. First up today, we'll head to Washington State to meet a former software entrepreneur who traded code for cabinetry and built one of America's most innovative kitchen companies. Kitchens are so primitive in the US, they're just boxes. And also the quality of most options is really low. So creating a system that's focused on innovating around cabinetry seemed really promising. And later, it's off to Japan to hear about a homegrown beer brand with the ambitions to go global.

0:50Almost without exception, people from other parts of the world respect Japanese quality. Internationally, we work, I guess, a bit harder to educate the consumers and to explain Okinawan culture to them and our beer. We'll also head to Lisbon for some house news. All that and much, much more ahead on The Entrepreneurs with me, Tom Edwards.

1:18You're listening to The Entrepreneurs. Can a kitchen function more like a workshop? That was the question motivating Seattle entrepreneur Scott Hudson nearly 25 years ago. Henry Built is the company that emerged from his tinkering. It's now a leading high-end kitchen builder producing cabinetry, drawers and fittings. A team of 120 designers, engineers and craftsmen produce some 600 kitchens annually from their Seattle facility. Monocle's correspondent in the city, Gregory Scruggs, toured the factory and showroom. He began by asking Hudson about his decision to exchange bits and bytes for hammers and nails.

1:54I started the company in 2001 after being in publishing and software for about 12 years and had spent the last six years raising money, venture capital. but then in 2001 the second one hit the wall and we had to sell it for the technology and I decided to take some time off and I started working on my house. I had renovated several houses myself while working in software in the evenings and it was I loved it. We bought another house on Vashon Island and I just kind of poured myself into that and along the way started thinking about creating a business that I would sort of not run. I could go back to software and keep that going on the side that was kind of design oriented and mostly around at that point furniture, because there's 2001, it was very difficult to get high quality, modern furniture.

2:52That's changed quite a bit since then. But in the US back then it was, it was tough. Started with that and then quickly realized that the kitchen was a unique opportunity because kitchens are so primitive in the US. in particular, but in general, they're just boxes. They sometimes look nice. They're really hard to do, but they're kind of process of taking, it's like a collage, you know, I'll get a cabinet maker, they'll make the cabinets, I'll find the knobs off, you know, or my architect will, and we'll get a countertop and it comes together and it often has multiple things that didn't come out quite right.

3:28And it's still just a bunch of boxes and a work surface. But from living in New company's showroom named Bafi, which is an Italian kitchen system company. And it started to ring bells. And I started looking into that and I thought, why don't we do this in the U.S.? There's really no one in the U.S. that works that way that thinks of the kitchen more like a car. You know, we're going to industrially design this whole thing so that it's really well integrated. Those companies, a few of them, maybe three or four of them, European companies, had unique functionality that they had developed, you know, that made a lot of sense.

4:06But to me, they were inflexible. In some ways, they were kind of more processed than most people might want in their home. They weren't designed for integration into an existing home, as much as here's an object that, you know, has a certain quality. If you put it in your house, it will be cool and interesting and hopefully function well, but they also had quality gaps. And so I started just playing around with that idea. We built a prototype and it very quickly, thanks to having a little bit of web experience, started a website and we had people calling us becoming clients from really far away.

4:45So like a guy who lived in China, had a house in Hawaii, someone from San Diego that walked by, we were striking a nerve, like somewhere between something that feels really custom made and crafted and something that has system performance quality. And at that point, it was very primitive. And I had no idea how hard it would be. But I just was so enamored of the idea that you could improve the way I felt to be in a house. Like I always, always feel too sedentary in a house. Like, I should be making something, you know, food is something you could make. But the kitchen is not usually organized as well as like a shop where you would make something physical.

5:27So that idea of, wow, this is a really cool experience to have in a home. And also the quality of most options is really low. So by creating a system that's focused on performance, where you're innovating around what people usually call millwork or cabinetry, seemed really promising. And it's also way harder than software. You can't fix bugs from thousand miles away. You know, you have that client and why you have a client in San Diego, and you have to figure out how to support that. Fortunately, we had some capability in doing that. We had early successes with that and the business grew largely online to the point where 25 % of our business was in New York in 2005, even though we were based here.

6:11And so we opened a showroom in 2006 in Soho. That was really successful, very tiny, kind of modest, but really successful. And we just kept focusing on developing this system around what it feels like to work in a kitchen, mastery of cooking, serving. And that became the brand. So we're standing here in the front of house, if you will, at Henry Built, where we are in a finished kitchen. What are some of the signature touches that make Henry Built kitchens so unique? So the goal is to have the right thing in the right place and to spend as little energy as possible doing the stuff you don't want to do as much.

6:51So this spice fitting tells you what it's for. If someone takes these spice jars out and uses them, they'll know where to put them back in extreme cases. So this is visual indication of what things are for. You have knife storage, utensil storage. You have flatware storage, all of which is both aesthetically artful and really highly functional. I mean, right down to slotted areas that fit the exact sizes of the forks and spoons for serving. Yeah, and the trick of that is this will actually hold 95 % of what you can buy, but it is shaped in a way that it says the forks go here, the large spoons go here, the small forks go here.

7:37The tools that we design are specialized, but their location is flexible. So, for example, we're looking at a colander that is made of wood and stainless steel. You can remove that from this hidden storage or toolbox on the countertop, and you can put it on the backsplash along with other tools, other systems like a knife, a knife block that magnetically attaches to the backsplash, keeping the countertop clear. I'm going to remove this colander from the wall and I'm going to put it in this recess drain field next to the sink which it fits perfectly in slide it over the sink rinse the lettuce

8:26and once I'm done and it's drained a bit I slide it back over into the drain field and it's out of the way. So that's what I mean by performance kitchen. Things are really tailored into the space. So you're taking something that might normally just be tile or stone or a countertop and you're making it interactive and flexible and able to take these specialized tools. That was Scott Hudson, the founder and CEO of Henry Built. And you can find out more about the business by heading over to henrybuilt.com.

9:07You're listening to The Entrepreneurs. We head to Okinawa now, where just this past month, Orion Breweries made history as the first local company to be listed on Japan's prime market. The brewer now faces the challenge of competing in the country's crowded beer scene while pushing for growth overseas. Monocle's Ryuma Takahashi caught up with Patrick Dugan, the company's head of international business, to hear how Orion plans to take its brand global. We're small, but we've been around since 1957. We were set up in Okinawa. It's our heartland and our home. And we're set up with the aim, actually, of helping to heal some of the wounds in Okinawa for the people there.

9:47And obviously, as we know, they had gone through a very hard time and to bring some happiness and opportunity for the island through beer. Orion is very close to the people of Okinawa. it's something that is really massively important to all the people who are leading the company and all of the workers. On 25th September last week, Orion Bay List entry listed on the prime market in Japan. Congratulations. This has been big news in Japan. What kind of impact were you aiming for when you decided to go public? Okinawa is not necessarily historically the most prosperous of the Japanese prefectures.

10:24And we're very proud to have gone public, especially because we are the first major industrial company from Okinawa to have done so. That was part of the mission when we got involved in the business as the sponsors and as the management team to bring real pride to Okinawa by doing that. We feel we've achieved that in the business performance and listing is a validation of that strategy. I think when people think of Orion beer, it really holds a unique position as a beer that symbolizes Okinawa among Japanese beer. Why do you promote Okinawa so strongly? What do you see as the potential of the Okinawa brand image?

11:04I think there's a couple of things in that question. One is we do very much, you know, on a basic level, our beer uses the water from the Yanbaru Forest, which is UNESCO protected. So it's a wonderful water source and we use barley and yeast in some of our beers that also come from Okinawa. So it's not just the people making it that are connected to Okinawa, also our ingredients. Okinawa, I think, means a lot of things to different people. People from other parts of Japan, you've heard the phrase the Hawaii of Japan, I think, in relation to Okinawa. For overseas visitors, it's slightly different.

11:39But common to all of that is that there's a real uniqueness to me. I've been coming to Japan for 20 years. Okinawa is a place that really has a special atmosphere. And there are beautiful beaches, there's beautiful scenery, but there's a warmth to the people. There's a warmth to the character. And that's what we want to convey in our beer. We want to bring the happiness of that Okinawa lifestyle, the chilled side of Japan, if I may say that, a more relaxed Japan than maybe you get in a big city like Tokyo. It's a big word, but it's the truth. And I think Okinawa is very much associated with that.

12:14And Orion is very strongly associated with Okinawa in the minds of especially Japanese people. I've noticed that your company operates the Orion Hotel in Okinawa. And I often see, for example, Orion beer t-shirts and some collaborations with fashion brands. I think you are putting effort into IP business beyond just beer business. What is the strategy behind this? You're right. It's a business that's been around for a while and been successful, but we have realized that we can take that to the next level and we're doing so. So we're expanding our range of partners in terms of the breadth of the products, which the brand can be associated on.

12:55So it can be seen by more people. So if you've been to Naha and walked down Coxidori, then there are some wonderful Orion branded products. We've collaborated most recently at the Beer Festival with Gap, with Philibong, an Australian brand. So we amplify the brand to some extent by working with these other fashion brands. And that's something that's also gained attention internationally. It's a nice margin business to be involved in because often it's our partners that are doing the management of production and the actual selling. So in terms of the financial model, it's a very attractive segment of the market to be in.

13:34And also, if done correctly, it brings the brand greater awareness. So people, they go back to Korea, they go back to Taiwan, they go back to Tokyo wearing a cool Orion t-shirt. That's a walking billboard for us. It's something where we see as very important. I think Japan has several very large companies with strong domestic and international power. in such competitive environment. What's your strategy for continuing to grow? Well, we're small but perfectly formed is the way I would describe it. Or you could say we're the original craft beer. You're right. We face their big giants. We are, I guess, to be frank, quite fortunate in some ways in that we are a long way away from the mainland because Okinawa itself is a relatively smaller market.

14:25perhaps there's less focus from those giants who are fighting each other in other parts of Japan but when we go outside Okinawa we don't try to take on the giants head on. We are fortunate in a couple of respects, we have wonderful liquid. Genuinely there's a taste difference, a little bit softer, what we call sessionable so it's quite easy to drink quite a lot of it. I've been in the beer industry for 28 years, which makes me sound very old. Hopefully I don't look it. And I really love Oreona, I have to say. It's a wonderful liquid. Anyone who drinks it loves it. But because Okinawa is actually a very expensive place to produce beer, because it's an island, we have to ship a lot of things in terms of the bottles, etc.

15:09It actually means that we cannot compete on price. So we can only compete on quality and on the strength of our brand. That in a way is fortunate because it means we can concentrate on the things that we're good at. And touch wood, it's working. Our overseas sales are growing very quickly and have done over the last few years. And also in the rest of Japan, outside Okinawa, we're growing with beer and with RTD, what we call ready to drink. So let's shift to your overseas strategy. First, which countries and markets has Orion beer expanded into outside of Japan? You can buy Orion in, I think, the last count 14 countries, possibly more.

15:48If you count it in Europe, it goes across some boundaries. But we divide our markets into focus markets. And then a couple of other segments, because we are a small team and small business. Taiwan is close to Okinawa, and they're the number one source of visitors to Okinawa. And it's our number one international market. We're in present in all of the convenience stores and supermarkets, often with multiple products. And a lot of that, there's a massive synergy in our business model which benefits from visitors coming to Okinawa and seeing Orion and then sampling it back in their own countries.

16:25And at the same time, by seeing Orion beverage in those countries, it raises Okinawa's profile. Our big markets are Taiwan, Korea is becoming big. Other Asian markets, Hong Kong, China also, and even Australia, you may not expect it, but we're with a couple of different products. We've cooperated with one of retailers on a product there and we're in the number one and the number two alcohol retailers in Australia. And obviously the US, there's a strong understanding of Okinawa, strong presence and it's a big imported beer market. We have America as a focus market. Do you differentiate your approach to marketing and branding when doing business in Japan versus international markets?

17:10Yes, the first thing I should say is this is the way most beer brands operate in their home market. The understanding and the perception of their brand and the positioning of their brand is usually very different. We also adopt that policy. So but fundamentally, we still have there's some of the pillars of the brand are the same, whether it's Okinawa, whether it's the rest of Japan or whether it's international. And that is, you know, based around the Okinawan character, the natural beauty of the place. but I think it would be fair to say that internationally we call it dialing up we dial up the Japanese quality element because almost without exception across the world respect Japanese quality and especially in beer and in food and beverage I think there's a rising tide of that so we want them to understand that we are Japanese and we are within that Japanese quality halo or umbrella as we call it but beneath that we offer something really different and that's that warmth and that relaxed brand we're currently certainly in Asia only brewed in Okinawa and that's not necessarily what the giants do, they've got a lot of different brewing in different places so that's one key pillar that we also talk about but because we're super premium in pricing internationally we work I guess a bit harder to educate the consumers about why we're worth paying a little bit more for and to explain Okinawan culture to them and our beer.

18:40How do you distribute Orion beer internationally? Is it mainly through the licensed production? No, no. We only, leaving aside the European licensed production, everything is produced in Nago. We have a wonderful relationship with shipping companies and a local logistics company who are practically part of our team. I think, I mean, last year we were 10 % of the Japanese beer that was exported was Orion. So we are, you know, starting to become a big part of Japanese beer exports. So we're a very big part of Okinawa exports. We export cans, bottles and kegs. The bottles are challenging because typically in Japan, bottles are returnable or they're used multiple times, but they're not internationally.

19:26So that's something we're trying to figure out, you know, the value chain for that. The business model for those is a bit more challenging. But kegs, keg beer, we send keg beer as far as the east coast of America. And then it gets delivered back to Nagua and we fill it and we send it back out again. So we do keg beer in seven countries. That's when Oriana, I think, is probably at its, you know, at its best in a bar where there's lots of throughput. That's when keg beer can taste fantastic. With this IPO, I think OEMB have achieved one milestone. But looking ahead, do you have any visions or goals for the company's future?

20:06We have many, many goals, visions. Yes, we're, as a Japanese company, we're always planning quite well in advance. So absolutely. But fundamentally, we will not rush into expansion. We will be cautious because it has to be sustainable. But we definitely want to, we want to become in our focus markets more relevant. So we want to be seen alongside some of those giants as a really unexpected choice to be available. for Europe, you know, to be our licensed business there in terms of licensed brewing of the product. We really would like to see that develop into some of more of the other markets as Japanese food and beverage expands.

20:46We want to expand with it and bring that Okinawa story to life because so many people just don't know about it. That was Patrick Dugan, Senior Managing Executive Officer and Head of International at Orion Breweries in conversation with Monocle's Ryuma Takahashi. You can find out more by heading to orionbeer-international.com

21:14You're listening to The Entrepreneurs. We head to Lisbon now. I'm delighted to say I'm joined here in the studio by two of Monocle Radio's finest Portuguese speakers, it says here, executive producer Carlotta Ribello and senior correspondent Fernando Augusto Pacheco. Welcome both. Hola, Tom. Olá, Tom. Now, tell me, you just got back from the other city of light. What did you get up to while you were there, Fernando? Oh, Lisbon is always a pleasure to go, right, Carlotta? I mean, we actually had a lovely tasca. I love Portuguese food. It was a sunny, beautiful day. And of course, we're celebrating the new launch of a product made in collaboration with Klaus Porto, which is an iconic brand.

21:56And I think even if you haven't been to Portugal, you will know about Klaus Porto. They make amazing soaps, amazing scents. It was a delightful evening. A regular brand that shows up in our markets here, our Christmas markets and summer fair as well. From your initial description, that did not sound much like work. It sounded like a big old jolly. No, it was work. We worked very hard, didn't we, Fernanda? And actually, we did something quite special, you know, because people say, Fernanda and Carlota, go there close to the entrance to say hello to the guests. We did our best. And sometimes I spoke in English and I'm like, oh, are you Portuguese?

22:27You know, but in the end, it was amazing. It was a wonderful event. The venue was the new Contemporary Art Museum, which is a new wing of the Calusco-Bencon Foundation, one of the oldest museums in Portugal. And it's this new beautiful wing that was designed by the Japanese architect Kengo Kuma, inaugurated just last year. So we were like on this, you know, 29, 30 degree heat, end of September, under this beautiful wooden and brick canopy designed bakuma. And I think we were expecting 80 people and 250 showed up, Tom. So the Lisbon best and finest showed up. Everyone was dressed so well. At the beginning of the event, I thought we might be overdressed.

23:06And then immediately I found out we actually were extremely underdressed. Yes. And tell me how fragrant the crowd, so very stylishly clad, fragrant. And just, again, let's sort of dig a little deeper, Corte. You mentioned these are kind of staples of our markets, but these products are so beautiful. Just, I know it's the radio. We can't do scratch and sniff, but give us a sense of how fragrant things are. I will give you my best attempt. So this is, of course, as Fernando described it, Klaus Porto, a heritage Portuguese fragrance house. And this is a collaboration that we've done with them, a new scent called Soleil Zest.

23:38Now, it is this scent that celebrates lightness and joy. we described it as you know continuing summer it's very citrusy the scent and it has a bit of white musk that gives you a little soft embrace when you spritz it it's very elegant and that soft embrace is what makes it different because let's be honest there's quite a lot you know some citrusy perfumes around there and you know it's lovely good for the summer but this one is there's a strong base there and i think i honestly it's not because it was kind of a commercial trip as well. But I love it so much. I think... Is it going to be in the regular Fernando Augusto Busceco rotation?

24:15That's the question. Absolutely, Tom. And, you know, and Tyler, in his speech, he says, you know, of course, it's autumn, winter. So perhaps it's a bit of a surprising launch as well, because some people think, oh, we should be a little bit woody or, you know, in the winter months. I don't think so. I think we need some freshness as well. And then the evening continued in a really elegant and beautiful way, because there was Then the sit-down dinner at the museum where the chef, the resident chef of CAM, he created this menu, André Magalhães, that's the name of the chef. He created a four-course menu.

24:47And I have here a printout, a little prop to show you, Tom, where he... It's quite a dainty little menu. It is. We're very classy like that. But basically, he was explaining before the start of the dinner how for the past couple of days, him and his team were spritzing the scent in the kitchen, trying to come up with how to replicate that scent into the dishes. So the starter, for example, was this amazing red prawn tartare with like lemon as the main flavor. It was a highlight for me. Then the main dish was quail with lemon and citrusy couscous, which was something very different. I had never eaten anything like that.

25:26Then we had this little palette cleanser that was a champagne coupe with a little lemon as well, sorbet. And I really loved the dessert, even though we were quite full by then. It was this panna cotta bergamota, which was incredible. I loved it. And extra points for a rhyming pudding. Always, always. So, Fernando, what is the fragrance of the coming season? We said it's the end of summer vibes, of course, Portugal. if people haven't done a late summer trip anywhere in Portugal, they should. As we drift into the autumn here in London, what should the autumn be, you know, smelling of? We've got, you know, seasons of mist and mellow fruitfulness and all the rest of it.

26:04What's the kind of, what's marking your card fragrance-wise? Honestly, as I said before, I think we should escape from the obvious. And I think a launch like this in late September, it's quite interesting. Citrusy, people would associate with summer. But as I said, with the strong base, it's perfect for the season. But Tom, of course, there's so many interesting brands and interesting launches there. I think the fragrance market keeps on growing, very special. But, you know, my favourites are always Celine and nightclubbing and, of course, close port to always. Very good, Fernando. And so much chat about these amazing fragrances, Colota.

26:35Did you learn more or talk more to the people who actually craft these beautiful things? Yes, I was actually able to meet at the event Daphne Buge, who actually is the perfumer who made this scent. She is a perfumer at Firminich. She collaborates heavily with Klaus Porte, and despite being usually based in France for this scent, taking our brief for this desire for a fresh new scent, she was based in Portugal and created it using materials and elements that she found in the Portuguese landscape, which was amazing. And then also at the event, we had this beautiful installation made from wicker and just crochet.